Switch to:
Verisk Analytics Inc (NAS:VRSK)
Beneish M-Score
-2.81 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Verisk Analytics Inc has a M-score of -2.81 suggests that the company is not a manipulator.

VRSK' s 10-Year Beneish M-Score Range
Min: -2.98   Max: -2.34
Current: -2.81

-2.98
-2.34

During the past 7 years, the highest Beneish M-Score of Verisk Analytics Inc was -2.34. The lowest was -2.98. And the median was -2.63.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Verisk Analytics Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.7885+0.528 * 1.0417+0.404 * 0.9067+0.892 * 1.114+0.115 * 1.1634
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9165+4.679 * -0.0626-0.327 * 0.8884
=-2.81

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $181 Mil.
Revenue was 409.643 + 332.463 + 438.597 + 421.32 = $1,602 Mil.
Gross Profit was 239.97 + 225.632 + 262.017 + 246.657 = $974 Mil.
Total Current Assets was $679 Mil.
Total Assets was $2,640 Mil.
Property, Plant and Equipment(Net PPE) was $252 Mil.
Depreciation, Depletion and Amortization(DDA) was $137 Mil.
Selling, General & Admin. Expense(SGA) was $227 Mil.
Total Current Liabilities was $516 Mil.
Long-Term Debt was $1,271 Mil.
Net Income was 115.558 + 87.223 + 96.441 + 84.205 = $383 Mil.
Non Operating Income was 0.009 + 0.007 + 0.001 + 0.093 = $0 Mil.
Cash Flow from Operations was 232.828 + 120.468 + 139.761 + 55.434 = $548 Mil.
Accounts Receivable was $206 Mil.
Revenue was 376.697 + 289.258 + 398.863 + 373.226 = $1,438 Mil.
Gross Profit was 233.065 + 209.703 + 242.114 + 226.152 = $911 Mil.
Total Current Assets was $553 Mil.
Total Assets was $2,516 Mil.
Property, Plant and Equipment(Net PPE) was $167 Mil.
Depreciation, Depletion and Amortization(DDA) was $116 Mil.
Selling, General & Admin. Expense(SGA) was $222 Mil.
Total Current Liabilities was $650 Mil.
Long-Term Debt was $1,266 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(180.95 / 1602.023) / (205.997 / 1438.044)
=0.11295094 / 0.14324805
=0.7885

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(225.632 / 1438.044) / (239.97 / 1602.023)
=0.63352304 / 0.60815357
=1.0417

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (679.204 + 251.731) / 2640.004) / (1 - (552.543 + 167.129) / 2516.347)
=0.64737364 / 0.71400129
=0.9067

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=1602.023 / 1438.044
=1.114

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(116.389 / (116.389 + 167.129)) / (137.256 / (137.256 + 251.731))
=0.41051715 / 0.35285498
=1.1634

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(227.088 / 1602.023) / (222.411 / 1438.044)
=0.14175077 / 0.15466217
=0.9165

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((1270.992 + 515.64) / 2640.004) / ((1266.467 + 650.422) / 2516.347)
=0.67675352 / 0.76177451
=0.8884

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(383.427 - 0.11 - 548.491) / 2640.004
=-0.0626

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Verisk Analytics Inc has a M-score of -2.81 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Verisk Analytics Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.07361.11720.8881
GMI 0.98930.94671.0379
AQI 0.86561.22460.9324
SGI 1.171.05711.1334
DEPI 1.06230.98411.103
SGAI 1.07610.99390.918
LVGI 1.020.83370.8667
TATA -0.0608-0.0588-0.0633
M-score -2.62-2.48-2.70

Verisk Analytics Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.07361.11830.98851.00551.11720.89611.11471.09910.90320.7885
GMI 0.98930.99130.99150.98760.94670.95130.96420.97381.02671.0417
AQI 0.86561.04830.99951.0791.22461.00261.01130.92270.93240.9067
SGI 1.171.1621.15631.15451.05711.05311.05291.03791.11451.114
DEPI 1.06231.06241.04621.04830.98410.9450.96351.05131.1031.1634
SGAI 1.07611.03480.99760.97820.99390.9860.95120.9370.92260.9165
LVGI 1.020.950.92690.8680.83370.86470.84430.83140.86670.8884
TATA -0.0608-0.0681-0.0417-0.0268-0.0588-0.0533-0.0741-0.0717-0.0633-0.0626
M-score -2.62-2.51-2.52-2.38-2.48-2.76-2.63-2.66-2.71-2.81
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide